Wu and Zhan will stay on as co-chairs, meaning they will stop being involved in day-to-day activities, but major decisions will have to be approved by them. This unexpected shift in power is perhaps the result of the triple failure of the Bitmain IPO not happening, Bitmain’s investment into Bitcoin Cash (BCH) turning into a big bust, and the overall crash in the crypto mining industry, which has caused sales of Bitmain’s mining equipment to dry up.

Bitcoin’s (BTC) hash rate peaked near 60 EH/s in August, September, and October 2018, before rapidly declining to as low as 32 EH/s in December. This indicates that up to half of all Bitcoin mining rigs were shut off at a point due to lack of profitability, which further suggests that cryptocurrency mining rig manufacturers like Bitmain probably saw their sales dry up and were stuck with huge inventories of rigs they could not sell. Essentially, the very lifeblood of Bitmain has been cut off.

Since Jihan Wu was an avid supporter of Bitcoin Cash (BCH) during the fork in November 2018, it’s possible that Bitmain held onto their stake in Bitcoin Cash (BCH) all the way through the fork, which would mean they have lost $2 billion. The potential losses from Bitmain’s Bitcoin Cash (BCH) investment far exceed the $952 million profit reported in 2017, which was probably by far their best year.

Bitmain received at least $400 million of “pre-IPO” investments in 2018, and this cash and all of their previous profits appears to have been burned through, considering that they are laying off over half of their employees, entire divisions are being shut down, and now the CEOs are stepping down. This was likely precipitated by sales drying up and the catastrophic Bitcoin Cash (BCH) investment failure. Now it appears there will be no IPO according to an announcement by Hong Kong regulators, which is no surprise considering Bitmain’s dire straits.

It is no surprise that Bitmain is opting to change its leadership as seen with the stepdown of Wu and Zhan. Bitmain started as a massive crypto success story under their leadership, but clearly, Bitmain’s strategy in 2018 has nearly destroyed the company.